The Dangers of Over/Underpricing Your Home

Every home seller wants a quick sale. And every buyer wants a bargain. Pricing your home too low can raise questions in a potential buyer's mind just as easily as an inflated price tag will drive people away. Finding the sweet spot involves some concentrated research, and it must be determined based on realistic expectations and an understanding of market trends.

Before listing a De Winton home for sale, consider the following:

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Market Trends

The most reasonable, and most effective course is to work with a real estate professional who can research local trends, and supply you with background information that will help you set a realistic price. Several statistics are pertinent: the average number of days on market of homes in your area, and a six-month survey of listing price versus selling price of closed properties. In "hot" markets, the number of days on market will be minimal, and selling prices are frequently higher than listing prices. If this is the case in your area, you might reasonably expect to sell quickly at a price higher than you expect. In a depressed, or "slow" market, the reverse is true, and a seller might want to consider additional incentives in order to promote a sale.

Comparables

Potential homebuyers compare prices in much the same way people shop for any other product. Browse homes that are similar to yours online, visit open houses to evaluate features, and ask your agent to supply you with capsule descriptions of properties in your intended price range. Those "comps" are invaluable in helping you determine the most advantageous listing price. However, statistics often don't tell the whole story, and it is wise to personally visit different neighborhoods to gain a better understanding of what drives the pricing in specific areas.

Your Home's Features

Try to view your home through the eyes of a first-time visitor. Be objective. No matter how well a home suits your needs, make a list of its strong points and possible deficiencies. Pay attention not only to square footage and floor plan, but also to design elements, interior materials, storage space, kitchen and bath appeal, views and landscaping. In addition, consider community amenities in your overall assessment of value. A home on the market is, in a sense, under a microscope, and a buyer will see its flaws as well as its best features.

Your Home's Condition

A previously occupied home will never look like a brand-new model, but time and dollars spent on ongoing maintenance and necessary repairs will return dividends in terms of a faster sale and a higher price. While a small percentage of buyers are not deterred by a home in need of extensive work, selling chances improve dramatically for a home in top condition, and it may actually be a prime determinant of price.

Location and Season

Neighborhoods affect pricing. Be honest when you evaluate the appeal of your location, but also realize that all communities have advantages and disadvantages. Contrary to the old real estate slogan about location, it is not the only thing that determines value! Finally, although homes sell every month of the year, spring and summer tend to be prime buying and moving seasons. If you have a choice, you might want to wait to list a home until winter is over.

Many variables affect pricing a home properly, and sellers should understand that listing a home is, essentially, an invitation to begin the negotiations that lead to a binding contract. Resist the temptation to start with an unrealistically high price, because that often serves only to discourage potential offers. On the other hand, a "bargain-basement" price tag will have some interested buyers wondering what is wrong with the property. Aim for a price that realistically reflects the home's value and compares favorably with other homes on the market.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.